I agree with almost all the points, but as someone looking from the outside in, I see YC as the most prestigious fraternity in the tech space. What do I mean by this? I go to the University of Michigan; coming in as an out of stater, I didn't know what to expect but I kept hearing this one piece of advice from current students, faculty, and friends that had also gone to big schools: "Find a way to make the school seem smaller to you." I never really understood it but when I arrived at campus for my freshman year, I quickly understood what everyone meant. There are SO many people and it's easy to get lost and have no sense of direction. So finding a community that aligns with your interests is ideal at a place like Michigan--I knew I wanted to get in with a group of bright, driven, and fun kids. One such place was described to be like this by almost everyone I spoke to in the beginning, it was a 'professional' fraternity where about 250 rushed and only 15 got in. I figured I'd give it a shot and went through the process and was selected. When asked why it's so great, I simply respond with, "The people in it make me a better person". It sounds vague, and it is to some extent, but it's true. Constantly surrounding myself with a small group of bright, driven, and fun individuals has truly made me smarter, more fun, and more open. It's been two years now (I'm a junior) and it is the single best decision I've made.
My long anecdote can be paralleled to YC. The tech space, especially in the bay area, is HUGE. Someone starting from scratch can be easily overwhelmed. YC seems to be the best place to get in a group with bright, driven, and fun individuals pursuing quite groundbreaking ideas, assuming you are one of them as well. That is why it is a desired place to someone like me.
All that being said, the aspect of mimicking a YC lifestyle is a great idea, I think all startups should do this and CAN do this given that it is not to expensive to get going.